Investing in a FedEx route basics

bacha29

Well-Known Member
I take no pleasure in what is happening to you guys including you IWBF. the task in front of us is to put our heads together and figure out what it is they' re up to. There are several possibilities which may or may not be converging. Their balance sheet is too debt loaded for Wall Streets liking. In their 3rd quarter 8K filing they announced that they have set aside 204 million for a proposed settlement of 19 class actions on appeal.That may not be enough and there is that big one, the nationwide class action under ERISA. They have also floated a bond issue to pay for TNT but the bond rating was down graded. Not to mention a lot of money committed to buy new planes. If I to sum it all up, I think that ongoing and future litigation and possible damage awards has them worried if not scared. Not to mention a global economy that is slowing. So keep our eyes and ears open and watch those SEC filings. But clearly they are unhappy and are preparing to take it out on the guys who remain.
 

Bounty

Well-Known Member
I take no pleasure in what is happening to you guys including you IWBF. the task in front of us is to put our heads together and figure out what it is they' re up to. There are several possibilities which may or may not be converging. Their balance sheet is too debt loaded for Wall Streets liking. In their 3rd quarter 8K filing they announced that they have set aside 204 million for a proposed settlement of 19 class actions on appeal.That may not be enough and there is that big one, the nationwide class action under ERISA. They have also floated a bond issue to pay for TNT but the bond rating was down graded. Not to mention a lot of money committed to buy new planes. If I to sum it all up, I think that ongoing and future litigation and possible damage awards has them worried if not scared. Not to mention a global economy that is slowing. So keep our eyes and ears open and watch those SEC filings. But clearly they are unhappy and are preparing to take it out on the guys who remain.
You know what's funny, when I decided to buy X stock I thought of these forums and let's face it X has found a way to have cheap labor, low liability and have contractors pay for their growth. It's almost perfect.
 

59 Dano

I just want to make friends!
You know what's funny, when I decided to buy X stock I thought of these forums and let's face it X has found a way to have cheap labor, low liability and have contractors pay for their growth. It's almost perfect.

A good grasp of the basics is better than a poor grasp of the fine details. Your analysis is much more accurate than bacha's.
 

It will be fine

Well-Known Member
It sucks but don't think for a moment X hasn't thought this out very carefully.
What in your experience with FedEx management would lead you to this conclusion? They are screwing us because the engineers say they can. The same engineers that plan the buildings and think package handlers can load 4 trucks without staging platforms because everything will magically fit on the trucks during the sort. PGH is run by people that are so far removed from reality it's not even funny.
The sad part is they may be right. People are accepting the bad deals and still delivering the boxes. No one is buying overlap though, the word is out that you get screwed and deals have been canceled.
 

Bounty

Well-Known Member
What in your experience with FedEx management would lead you to this conclusion? They are screwing us because the engineers say they can. The same engineers that plan the buildings and think package handlers can load 4 trucks without staging platforms because everything will magically fit on the trucks during the sort. PGH is run by people that are so far removed from reality it's not even funny.
The sad part is they may be right. People are accepting the bad deals and still delivering the boxes. No one is buying overlap though, the word is out that you get screwed and deals have been canceled.
What happened iwbf, it seems you have changed your tune.
 

bacha29

Well-Known Member
Stop jawing at each other. It accomplishes nothing. Something big is coming. Let's put the insults and put downs aside and try figure this thing out. And Dano, it's all there in the SEC filing.
 

bbsam

Moderator
Staff member
What in your experience with FedEx management would lead you to this conclusion? They are screwing us because the engineers say they can. The same engineers that plan the buildings and think package handlers can load 4 trucks without staging platforms because everything will magically fit on the trucks during the sort. PGH is run by people that are so far removed from reality it's not even funny.
The sad part is they may be right. People are accepting the bad deals and still delivering the boxes. No one is buying overlap though, the word is out that you get screwed and deals have been canceled.
My experience is that everyone from OP's managers up to VP's have been talking about it for 3 years now. HD will be 6 days a week and so will Ground. There will soon be no distinction between Ground and HD as far as "H" or no "H" being on the label (going to 1 label).

For a lot of HD drivers, the day ends at 2pm or earlier. Think about that for a moment. What do the VP's and Memphis see when they see that? A waste of assets. How many pickups could be serviced in that time? Likely a great many. It's just like it's always been. Adapt to their vision of their future or go. They really don't care.
 

It will be fine

Well-Known Member
What happened iwbf, it seems you have changed your tune.
Just responding to the original post. With the contracts coming out recently it's a bad time to invest in a Ground route. While the overall pie of revenue and profit is growing FedEx wants our slice to get smaller and smaller. They claim growth will make up for the low rates they want to pay, apparently believing we can get drivers to do 175+ stops a day for $35k/year. They think our trucks can fit 400+ pieces on them a day. They've gone far beyond reasonable and expected greed.
 

bbsam

Moderator
Staff member
Just responding to the original post. With the contracts coming out recently it's a bad time to invest in a Ground route. While the overall pie of revenue and profit is growing FedEx wants our slice to get smaller and smaller. They claim growth will make up for the low rates they want to pay, apparently believing we can get drivers to do 175+ stops a day for $35k/year. They think our trucks can fit 400+ pieces on them a day. They've gone far beyond reasonable and expected greed.
I just went back over my new contract that I signed in March and while there is a dip in compensation, it's nowhere near 10%. Maybe 3 to 5% and should easily be made up for by growth and infusion of Smartpost packages.
 

Bounty

Well-Known Member
I just went back over my new contract that I signed in March and while there is a dip in compensation, it's nowhere near 10%. Maybe 3 to 5% and should easily be made up for by growth and infusion of Smartpost packages.
So deliver more packages, take on more liability and hope to make the same $. Sounds like a good deal.......for X.
 

It will be fine

Well-Known Member
So deliver more packages, take on more liability and hope to make the same $. Sounds like a good deal.......for X.
Exactly. It's crazy thinking. It's like telling an hourly employee, "I'm going to lower your pay rate by $2/hr, but it's cool, I'll also have you work an extra 3 hrs a day so it evens out."
 

bacha29

Well-Known Member
Bounty, knock it off. Many of these guys have everything they've got tied up in their operations. The challenge ahead is to send that company a clear message and that message is " we have 6 and in some cases 7 figures tied up in this and as a result you're not going to treat us like Uber drivers". Clearly X has set out to expand it's margins at the expense of contractor margins. Profit margins are the basis for equity creation but as I said earlier the business model never has and never will have anything to do with creating equity for contractors. Now you are being required to provide trucking and labor at an even lower cost. My advice. Give them only the minimum required. Pay off debt and consider selling out because given the direction this thing is headed chances are your routes are not going to be worth anymore 5 years from now then they are right now.
 

Bounty

Well-Known Member
Bounty, knock it off. Many of these guys have everything they've got tied up in their operations. The challenge ahead is to send that company a clear message and that message is " we have 6 and in some cases 7 figures tied up in this and as a result you're not going to treat us like Uber drivers". Clearly X has set out to expand it's margins at the expense of contractor margins. Profit margins are the basis for equity creation but as I said earlier the business model never has and never will have anything to do with creating equity for contractors. Now you are being required to provide trucking and labor at an even lower cost. My advice. Give them only the minimum required. Pay off debt and consider selling out because given the direction this thing is headed chances are your routes are not going to be worth anymore 5 years from now then they are right now.
Me knock it off. These two guys 3 months ago was telling us what lousy business owners we are and how we didn't do our due diligence and how they were great entrepreneurs.Now they are realizing who they are in bed with. I bought the stock (after due diligence) and I want X to keep costs low.
Ps. up $17 a share since the purchase
 

bacha29

Well-Known Member
A year ago the stock was at 185. Look I know what they said to us but in this situation from a contractor perspective nobody's the victor. The task right now is to uncover as much information as can be obtained with the purpose of helping them to survive in the face of the company's unbridled greed. The single routes to due their sheer number provided a firewall against what we are seeing now. Heavy downward settlement pressure on debt saddled ISP's smaller in number overall at a time when wages are starting to trend upward and the size of the qualified driver pool in some areas getting smaller and that area will probably expand. It was good of IWBF and the others for coming clean with what is happening and never getting off their backs drags you down to Dano 59's level who we all know is just another brainwashed company ball sucker.
 

It will be fine

Well-Known Member
Me knock it off. These two guys 3 months ago was telling us what lousy business owners we are and how we didn't do our due diligence and how they were great entrepreneurs.Now they are realizing who they are in bed with. I bought the stock (after due diligence) and I want X to keep costs low.
Ps. up $17 a share since the purchase
Situations change. 3 months ago and the 5 years prior when a contractor expanded operations to cover more area the value assigned to the area went up according to the engineers. That is no longer the case.
It used to be contractor A sells a zip code to contractor B. Both renegotiate. "A" gets $X less than what they were making because they are now smaller. "B" gets 70%X because they are now bigger. FedEx takes 30%X because they're greedy.
Now it's both "A" and "B" get 15% less than they are currently making because??? But growth will make up for it somehow.
It's ridiculous and if the trend continues contractors will fold and no one in their right mind will take over the area. Even if they were giving it away free, if the resulting renegotiation means less revenue why take on the extra headaches?
 

bacha29

Well-Known Member
No question they are stockpiling cash in anticipation of many possibilities. I friend they are going to bleed out your equity guys and there's no question that is what they're going to do in order to stock pile cash, then what is the sense of trying to keep going with it when clearly it's going to get harder. Some of you ISP's simply got greedy but you ran up against somebody who is a whole lot greedier and they will continue to take an even larger cut. I talked this am to the guys at the barn I worked out of and they tell me that they have been told the same thing. Around 20% seem like the going percentage. As for growth I and the guys at my terminal believe that this ongoing action is due to their belief that they are about as big as they're going to get evidenced by the fact that their operating margin this past quarter was down from previous quarters and therefore they've set out to lock up the best margins and cash flow they can ahead of slowing growth. Even more reason to consider finding some slug who doesn't know what he's getting into and sell to him now rather than wait hoping that the situation will improve and the odds of that happening are go down with each passing day.
 

Bounty

Well-Known Member
A year ago the stock was at 185. Look I know what they said to us but in this situation from a contractor perspective nobody's the victor. The task right now is to uncover as much information as can be obtained with the purpose of helping them to survive in the face of the company's unbridled greed. The single routes to due their sheer number provided a firewall against what we are seeing now. Heavy downward settlement pressure on debt saddled ISP's smaller in number overall at a time when wages are starting to trend upward and the size of the qualified driver pool in some areas getting smaller and that area will probably expand. It was good of IWBF and the others for coming clean with what is happening and never getting off their backs drags you down to Dano 59's level who we all know is just another brainwashed company ball sucker.
Bacha, I'm just trying to make some $. Believe me I wish the worst for X, but it doesn't seem they can be stopped. Think about it, if the government lets them get away with the scam, they have a huge competitive edge over ups and the post office. They don't have to buy trucks, cheap labor, low liability. $200 stock by the end of the year in my opinion. You might as well get in on it.
 

bacha29

Well-Known Member
I have accounts with 2 brokerage houses and I make about 30 -35 trades a year. I had some X stock awhile back and sold it at a decent profit but I sold it out of sheer contempt for that company. I thought about picking some up when it was down to 125 earlier this year. Instead I bought some shares in an ETF that tracks the S&P 500. The reason was after reading it's 10K and 8K filings it showed that the sun is not shining on X as brightly as it seems. No question that they are simply mauling the living crap out of the remaining ISP's in order to maximize margins but clearly they are planning for more losses in ongoing litigation. Remember what I said earlier. The fate of remaining contractors will be decided in the courtroom and the boardroom and because they got themselves too deeply entrenched in the game all they can do is to try to adapt as best they can.
 

Cactus

Just telling it like it is
I just went back over my new contract that I signed in March and while there is a dip in compensation, it's nowhere near 10%. Maybe 3 to 5% and should easily be made up for by growth and infusion of Smartpost packages.
Take off the rose colored glasses.

Less pay and more work? Wow, sounds like a "great" deal.
 
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